Bidding War: TPG Has Increased Its Offer For iiNet

The bidding war for Aussie ISP darling, iiNet, is in full swing. In response to a bid from M2, original bidder TPG has upped its offer for iiNet, promising over $1.5 billion.

TPG originally offered to buy iiNet for $1.4 billion, which saw the shares valued at $8.60 each. Shareholders were also offered a dividend of $0.105 per share in the initial deal on top of the buyout price to sweeten the deal.

Since then, M2 Communications offered $2.25 billion for iiNet, kicking off a bidding war.

TPG reconsidered its offer and this morning informed the market that it would offer $9.55 per share which includes an upped dividend of $0.75, putting the total offer at $1.57 billion.

The difference between the TPG and the M2 offer is that TPG is offering iiNet's shareholders a cash buyout of their investment, as well as a cherry on top in the form of a dividend. M2's offer sees iiNet shareholders compensated with more M2 shares which may not be as attractive to some investors focussed on the bottom line.

Since the bidding war for iiNet started, its shares have jumped to an all-time record high of $10.06 per share. At the time of writing, iiNet is trading at $10.

The iiNet Board this morning recommended TPG's enhanced offer.

Whatever happens between iiNet and its potential suitors, the brand isn't going anywhere.

The iiNet board told the market this morning that both TPG and M2 have pledged to keep the brand going:

Both TPG and M2 have indicated their intention to retain the iiNet brand, and accordingly, the high level of customer service that iiNet is renowned for, which is a testament to the significant value that has been created by the staff of iiNet.

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